A Lousy Summer for the Movies: Box Office in Free-Fall

Hollywood needs a superhero—badly. In June and July, domestic box-office receipts tumbled 40% from the same period last year, to about $1.5 billion. This July produced the worst total box office of any July since 1995, $572 million, and the lowest average per movie, at $14.3 million, since Box Office Mojo began keeping statistics in 1982.

Big-name superheroes rescued last year's receipts, with Man of Steel and The Wolverine pulling in $291 million and $133 million, respectively. The closest thing to a superhero this summer has been Hercules, but the ancient demigod couldn't even top the competition on its opening weekend.

Short: July saw its worst total box office since 1995, and the lowest average take per movie since 1982.
Illustration: William Waitzman for Barron's

"This is not an issue where people don't want to eat popcorn and go to the movies—people just don't want to see dreck," says Matthew Harrigan, an entertainment-industry analyst at Wunderlich Securities. With big expectations for next year's films, including additions to The Avengers, James Bond, and Star Wars series, this summer's choices have mostly fallen flat. Case in point: Transformers: Age of Extinction, the biggest franchise of the summer, has a rating of just 17% on Rotten Tomatoes, a Website that aggregates reviews from critics. The movie is on pace to fall short of the previous three movies in the series at the box office.

There is one last hope for Hollywood in The Guardians of the Galaxy, a movie based on a Marvel comic. The film is expected to rack up over $70 million in its opening weekend, rare for a release in August. While not exactly The Dark Knight,The Guardians does feature a talking tree and a genetically engineered raccoon. Super.

-- Michael Vallo

Last Week

GDP Rebounds

The U.S. economy rebounded sharply in the second quarter, with gross domestic product growing 4%, after shrinking at a 2.1% rate in the previous quarter, revised from a 2.9% drop. But some cautioned that a larger than usual share of the growth in the latest quarter came on inventory buildup.

Fed Assessment Brightens

The Federal Reserve kept paring its bond-buying program and said economic activity rebounded in the second quarter. Although it noted that labor-market conditions had improved and inflation had moved closer to its longer-run objective, it maintained its expectation of keeping the current target for the fed-funds rate intact for a considerable time. One member dissented.

Steady Trend in Jobs

U.S. job growth exceeded 200,000 for the sixth month in a row in June. Though the 209,000 additions fell short of predictions, the previous month's tally was revised up to nearly 300,000. The jobless rate ticked up to 6.2%, as more people entered the labor force.

Market Downer

Stocks stumbled in July, with the Dow Jones Industrial Average clocking a 1.56% loss in the month, the first monthly loss since January. The Standard & Poor's 500 index also registered a July loss, of 1.51%, to 1930.67 points. Some worried that upbeat labor-market news could prompt an earlier rate rise.

Turning Up Heat on Russia

The U.S. and the European Union imposed tougher economic sanctions against Russia in response to its stance on Ukraine. The new measures targeted Russian banks, the oil industry, and the military. Moscow called the new sanctions "destructive and shortsighted," and said they would lead to higher energy prices in Europe. Russia also banned most fruit and vegetable imports from Poland.

Default Redux

Its dollar bonds sank after Argentina defaulted on its bond payments for the second time in 13 years. Argentina's talks with a mediator failed to resolve a standoff with creditors who had rejected its debt restructuring after the last default.

"Hustle" Penalty Imposed

Calling a program nicknamed "Hustle" a "vehicle for brazen fraud," a federal judge levied a $1.27 billion penalty against
Bank of America,
for its Countrywide unit's role in selling risky mortgages to
Fannie Mae
and
Freddie Mac.
BofA said the program ended before its purchase of Countrywide.

Rival Bid for T-Mobile

French upstart telecom company Iliad made a surprise $33 a share, or $15 billion, bid for 57% of T-Mobile. The offer sets up a potential bidding war with
Sprint,
controlled by Japan's SoftBank, which has agreed to pay roughly $40 a share.

Lawsuit in Allergan Battle

Allergan
sued
Valeant Pharmaceuticals
and Pershing Square's William Ackman, accusing them of insider trading in their hostile takeover bid for Allergan. Valeant called the complaint baseless, and Ackman said it was an attempt to delay holders' right to vote their shares.

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